Perlen, Switzerland 25 July 2017 -- Switzerland's Papierfabrik Utzenstorf has announced the shutdown of newsprint production, which will take 200,000 tpy of capacities from the market. The company's recycling activities will be taken over from Perlen Papier.

Swiss company Papierfabrik Utzenstorf will stop production of newsprint at the end of 2017. The firm said the decision came in response to a massive decline in earnings. Along with a shrinking market, margins had come under pressure due to the weakness of the euro and rising raw material costs, it explained. Simultaneously, Papierfabrik Utzenstorf signed an agreement with Perlen Papier, a subsidiary of the CPH group, that will see Perlen take over the firm's distribution contracts, customer relationships and warehouse, as well as its recovered paper procurement contracts and sorting facility for recovered paper as of 1 January 2018. The two parties agreed not to reveal the transaction costs.

With the revenues from the sale, Papierfabrik Utzenstorf, which currently has around 220 employees, wants to implement a social plan and meet its financial obligations from the operating business. The company, which generates sales of around CHF100m, had been loss-making lately. The company's decision will remove around 200,000 tpy of newsprint from the market, comprising 30% improved grades and 70% standard grades.

According to the statement, Perlen will continue operations at the recovered paper sorting plant in Utzenstorf, which processes 30,000 tpy of recovered paper and board. Perlen will take over the equipment and a small number of employees (currently said to be seven) and will rent the facility. The recovered paper sorting contracts cover around 260,000 tpy.

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